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tv   In the Loop With Betty Liu  Bloomberg  August 19, 2014 8:00am-10:01am EDT

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we have a great show for you this morning. announcing a massive mining spinoff, separating aluminum, coal, and silver divisions. we will bring you all the details in just a moment. clippers los angeles owner, steve ballmer, speaking out like only he can. we sat down with an exclusive interview. you do not want to miss it. would you not like to own your very own life-size lego house? at your age, i hope the answer is no. for the woman who has everything else, it is a possibility. we will take you to denmark to speak with a ceo about the company's new sold-out line for girls. first, a look at our top headlines this morning. bhp preparing for the biggest spinoff in mining history. bhp is separating its aluminum, coal, and silver assets, creating a company value of $6 trillion after next year. home depot posted second-quarter
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profit that beat estimates. the world passes largest retailer in the u.s. raised its full-year forecast. we will talk about what this means for housing and the u.s. economy later in the program. and standard chartered is settling claims of new york regulators over failure to flag potential money laundering of its clients. it may have to pay $300 million and will likely once again get a stern talking to. let's get back to bhp's spinoff announcement. we are joined with details. tell us about the biggest spinoff in mining history. why now? question. a key this could represent the end of the commodities super cycle. that is the first sign of it. capital bhp's return on -- two years later, 13% in just two
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years. the reason why you can now argue the assets are finally cash flow positive, they are expecting prices to rise somewhat, metal could also rise, you could argue they are valued about $15,000. not the worst time to do it. what this winds up reflecting is how horrible the mining industry -- then and how puddled pummeled they have been. we hearing anglo american could follow suit and do a major spinoff as well. trying to get out from underneath the write-downs. >> $50 billion and starts trading next year. >> that only accounts for 40% of the total earnings for the country. is the problem minors have. >> they are so big, metal prices cannot keep up and they wind up getting pummeled. that is what happened across the sect or.
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operations,, nickel aluminum assets, schedule to break up in 2000 15. it will also sell separately .ickel operations australia as well as south africa but not the u.k., an interesting development especially for investors there. what does it leave bhp with? is it just an empty shell? >> not at all. you have iron ore koppel, -- copper, they have lower operating costs, and management to generate return in excess of 20%. thatssue now with bhp is investors hoped they would announce a buyback program today.
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>> investors were hoping for a buyback program. >> right. less than expected. jeffries coming out saying, look, i do not know if the non-core assets were undervalued in the first place. how much is this spinoff going to create more value for the company? that is one of the questions going forward. expect to see more headlines with management ceo changes. we could wind up seeing more spinoff with big eyes who cannot seem to keep up. >> we will follow it closely. thank you for the update. in a hostile hotspot for the nation, tensions remain high where police crashed again in a group with 50 protesters, firing tear grass -- gasp. -- tear gas. >> i understand the passions and the anger that arised over the death of michael brown. giving into the anger by looting or carrying guns and even attacking the police only serves
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to raise tensions and chaos. more, -- >> for more, on the phone at the sight of the original protests, thank you for joining us. governor nixon lifted the curfew to ease tension last night. has that made any difference at all? night, it looked like it was. everything was peaceful around 10:00 p.m. protesters. before midnight, before the curfew that had been lifted, there was tear gas in the streets and police were shooting grenades at protesters. working. like it was before midnight, everything went to chaos. >> teargas and some grenades are their own little curfew. the looting we have heard about for so many days, not so much important aspect of what is going on, but clearly there are much eger issues at stake here, but one of -- what
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do the local businesses look like right now? >> the worst of the looting happened last week and several stores were hit. after that, a lot of businesses boarded up their windows and protected themselves against looters. what we have seen in terms of criminal actions, we have seen some gunfire, some shooting, we have seen people who have thrown bottles at police officers. that led to the teargas and .renades a minority of the people have been trying to stir up some anger among police and the crowd. >> we have heard reports from inice that people are coming from as far away as new york, andangeles, with firearms, discharging them. are they shooting at police? where are they shooting?
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>> it is hard to tell. i was here last night until about 3:00 in the morning. every now again, you would hear a barrage of fire. -- gunfire. it is hard to tell if these people are shooting against each other or try to aim at police. defensive taking a stature and basically shooting teargas at anyone who looks like they are not following directions or looks like they could be a threat. no police officers have been injured yet but they are making a strong provision in terms of militaryrgas, and style gear, to make sure they are protected. act theis a turnaround original strong-arm tactic we thought would be finished once the highway patrol was brought in.
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how has the turnaround happened? was the release of the micro brown -- michael brown videotaped? seemed like things were peaceful at first and police are responding to just a few agitators within the crowd. if one person out of 100 or 200 people, if one person throws the bottle, and police go back and they bring their armored trucks and police officers. upseems like there am thing whenever there is one act of violence or criminality in the crowd. it seems like the police are responding to what has happened in the crowd, but they are bringing their full, strong military style responses to what is basically people throwing rocks and bottles. >> maybe a little overreaction there. we wish you well and hope you are safe.
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yesterday, microsoft billionaire steve ballmer held his first rally in his new job as owner of the l.a. clippers. he showed no matter what he does, he knows how to get a crowd excited. [indiscernible] [applause] the crowd and hopefully steve ballmer himself calm down, trish regan sat down with the former ceo to find out what his plans are for the nba team. >> i want the clippers to be the very best they can be. the best team, the best players, the best character, the best coaching staff, the best is this, i want all of that for the clippers. that just means we will have to be hard-core about working to be better.
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excited fans are very and a fired up group. a loyal group. no question. clippers fans seem almost conscious. we chose the clippers. that is a fun and exciting thing. >> they feel like you chose them? >> i do not know about that. i think clippers fans are glad to be able to focus back on the basketball. >> doc rivers, a big force holding this team together throughout this difficult time. what will happen to them? will he stay on? >> my job is to figure out what i can do to support him. >> what is your leadership style and how's that applicable to this team? >> i am enthusiastic, passionate, optimistic. i will also ask a lot of questions. i will not say i micromanage but i ask a lot of questions. that is how you, in my opinion,
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push to be better. all of those things worked in a business. aen i joined microsoft, couple million in revenue. when i left, 100,000, 90 billion in revenue. the second third most profitable in the world. i think that worked pretty well. the question is do those same characteristics apply, the desire to be better, optimism, enthusiasm, passion, i think those same qualities probably work pretty well. the first job is to get the right people in place. i am not the expert. you have got to have experts in place who can run all the various parts of the clippers. >> one of the challenges i imagine doc had is recruiting players. no one knew what the future of the team actually was. now that you're at the helm, now that there is a path of clarity, who would be your top choices to bring in? >> there is no question with
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stability comes opportunity. doc made it clear to me having stability and the ownership does make it easier for him to do a lot of things, including improving. >> la clippers owner steve ballmer there. you can see more of this in "streetnterview smart" the next hour. of course, trish regan's own show a three clock p.m. eastern. stay with us all day for more clips. go online, check it out on bloomberg.com. access it on your mobile device. check it out on apple tv or on amazon fire. ♪ >> sticking with sports, moving and shaking this hour, tiger woods. even when he is injured, he manages to stay in the spotlight. he appeared yesterday in new jersey at a promotional event for nike's golf clubs here you have got to get paid. also there, the top golfer in
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the world, rory mcilroy. the host of nbc late-night was there as well, jimmy fallon. rehabbing back until december. he and erik schatzker spoke about the future of golf. >> participation is hard. it is neat to see other top athletes like michael jordan .lay golf tony romo, a bunch of different celebrities. steph curry has got a game. athletesese other play golf. that is when you make golf corp. -- cool. i am having trouble reading the proctor this morning. we will show you some of rory's interview later. of tiger on market makers starting a 10:00 a.m. eastern. coming up, chances are, you know someone in public -- i'm pretty sure they make the nikkei he --
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nicotine kind. we will see how high the trend gets. ♪
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>> am. all tobacco reported a smaller drop in revenue than analysts estimated. the world passes largest cigarette company named weakness in iraq. it also said it was on track to complete its acquisition of a pack of u.s. cigarette brands, which it gains last month from the lorillard megamerger. the deal included blue electronic cigarettes, the top selling in the u.s. the second-largest e-cigarette manufacture in the u.s., although your biggest market is here, you expanded recently to australia and canada as well. how important is this globalization and how is it going? i see a lot of people shaping here in the u.s.. vaping here in the u.s.
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primarily on the u.s. market. you of other markets, whether it is u.k. or other parts of europe, where this is gathering a lot of steam. differences between electronic cigarettes and combustible cigarettes, you will .ee an increase also, the technology of the products. the capacity in the growth will be much faster than what you have seen. the two countries you mentioned, canada and australia, we only sell a zero nicotine product. we do exceptionally well in those countries. >> what is the point of an e-cigarette with no nicotine in it. i thought the point was getting the fix. >> there are four primary forms of addiction for adult smokers. hand to mouth, the flavor, the smoke, and the nicotine. that is why patches and gums have not been successful.
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if it were just nicotine, they would have been wildly successful. electronic cigarettes mimic other formats. it allows adult smokers and alternative, without nicotine. >> what is the deal with the health effects of, let's talk about regular nicotine e-cigarettes. smoking normal cigarettes obviously leads to death via lung cancer, normally. are there carcinogens in an e-cigarette? you're not burning tobacco really. the pa, we feel is the primary place to learn about these products and it has started the research. you also see research at the cdc and nih. what we now know is how harmful and toxic cigarettes are. we have 50 years worth of research are there is clearly a difference in the way those
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products are constructed. very soon, you will see a lot of studies, toulation truly understand. one thing they know about the electronic cigarette is you can modify them, you can modify the chemical aspects. if there is something brought to our attention, unlike a traditional cigarette, you can make modifications to it. >> do you only sell packaged and disposable e-cigarettes or is there any way i could put whatever i want in the products? do you sell vaporizers i could put a cherry flavored nicotine in? >> we don't. we have disposable and rechargeable products. we are not a number one company in the u.s.. >> congratulations. >> right now, you are not allowed to readily access that or alter it as you mentioned.
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anyone can get a hammer and break into them and do that. we think it is important for the consumer to know exactly what is in their products. there is a lot of interest in the modifiable's and other aspects, that is not what we are selling right now. don't smoke, but if i did, i would want to be looked at but anything i want+++
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apparatus that i am buying. >> you would, but maybe you don't because you do not know what the impact of that will be. you do not know what the harm is. i think there is a certain comfort someone should get from the standpoint a large manufacturer has created this item, it is what they say it is and is disclosed in a proper manner. >> thank you for joining us. coming up, how much is your home worth? we are moments away from the latest snapshot -- snapshot from the real estate and construction industry. housing starts in a few minutes. ♪
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>> you are watching "in the loop" live on bloomberg television and streaming on your phone and on bloomberg.com. i am at miller. here is a look at your top tories today. iceland is breaking -- bracing for a possible eruption of one of its biggest volcanoes. ash from a volcano eruption watcher years ago -- you're for days on end. bank of america will now be the bank's chief operating honor, tom shared the job with david since 2011. david is taking a new title so he can move to florida. montag was paid $15.5 million
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last year. the lowest level on record in the u.s. the americans are drinking more exotic juices like pomegranate, energy drinks, and ready to drink coffee have also gotten more popular. is 26 minutes past the hour. bloomberg television is on the markets. take a look at futures up across the board again today ahead of the economic data that we are minutes away from here. we rallied yesterday and had a great week last week. things are looking up for august. futures up 2/10 of one percent. dow jones futures up 40 points and nasdaq futures, the nasdaq index at its all time high were at least the highest ends 2000 against a 14 year high, 14000 and 23. as i said,waiting, housing data. home depot posted second-quarter
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profit that topped analyst estimates this morning. forecast.its housing and retail sales data showed strong gains from a year earlier. does this say about the housing market in general? for more, i would like to welcome the metro study chief economist who analyzes the trend in the housing market and joins me from florida. and michael mckee is here with me as well. let's talk first about home depot. for thetill waiting housing start data we will get in about two minutes time. what do you make of the home depot information? i always think if more people are going to home depot, fewer people are going to be out buying homes. maybe they are picking up their own for a sale. what does it mean for you? >> he could mean either one. we track an index we created,
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the remodeling index. increase ins is an the modeling and at -- restoration of the homes. part of that is people buying homes and fixing them up and part of that is people saying, i will stay in the home i have got for a while and keep on maintaining it and making it at her. -- better. >> home depot, i always like to look at it and know people out there -- i spent a lot of time myself on home depot. >> they always do well in the second quarter. springare starting their cleanup fixup garden planting, and they hire a lot of extra people in that quarter. it does not necessarily give you -- you do not seasonally adjust corporate earnings. it does not give you a great picture of how the housing industry is doing. we have seen the housing industry is a bit little bit but housing starts are still only about half of what they were at the peak in 2006-2008.
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a newher than building house, you are fixing the deck at your own house or installing a new bathroom or whatever it may be. are the home depot results so good that it changes your mind or are they just confirming a fairly optimistic outlook? >> it is a fairly optimistic outlook either way you slice it. we have had a lot of weakness in the new home market and a new homebusiness -- the new business over the past year. part of that has been to sticker shock, builders got ahead of themselves in terms of home price. it created a frenzy and that is what caused the weakness happening all year this year. people had just pulled forward their demand and we are seeing a hangover from that. household will increase in the
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new job growth and that will make for a good rest of the second half and on into 2015 for the new home side. >> the best cure for a hangover is to build new houses. we will see in 30 seconds -- five seconds whether they are doing that. fromused to the data 2008-2000 9-2010, anything. we're getting breaking headlines across the bloomberg terminal. what are you seeing? >> it looks like in terms of the consumer price index it is exactly as forecast coming in, up. up 2/10, meaning the annual rate goes down a little bit. two percent, 1.9% and that will keep people on the sidelines in terms of the fed. starts number is particularly good. 15.7%. the forecast was for a .1%. -- 8.1%.drop
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we had a drop. 1,093,000 on an annual basis. >> that is nothing compared to the days you and i -- 1.7t is nowhere like million and 1.8 million. it has been a while since we have seen these kinds of numbers. there is particularly good news. before the numbers came out, you had a way you could really get the numbers to be good for the markets and we got that. strong housing, an indication whichonomy is picking up, will tell investors perhaps the fed will not be jumping in here. sees no reason to cool down inflation. if she sees no inflation, as opposed to the average american, who probably sees a lot more inflation than janet yellen does.
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is much bettera than we are looking for. >> we have seen them alternate. .e get strong growth 29% gain in apartment construction. that did not take away from single-family. moreu have gotten steadily optimistic when it comes to employment and housing. what is your take on the numbers? million forer one the first time in recent memory. definitely much better than we were looking for. >> it is right in line with my forecast. when last month's numbers came out, it showed production starts in june and in particular, when that release on the census bureau said, on the south, down 29.6%, the number will get revised upward. big jump upl be a
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in the next month's number. it does not surprise me. of steady-state level housing starts right now is about one million. it will go up next year. increase thean 18% numbers that came out from the census last month did not make sense vis-à-vis the numbers we track. we literally drive the distance from here to the moon every quarter, counting housing starts. in doing so, we are able to see the breakdown in the south. the census bureau says the south but we track charlotte, atlanta, and so on, florida, texas, those markets were up, according to our numbers, through midyear. it did not wash. >> this will be one of those little mysteries to look at.
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down in june, in july, up 29%. of that decline was payback and more. maybe you get a net gain of three percent over the month. >> statistical noise. i think the census bureau was working with a tiny example. they are working off working permits and surveys. it is not nearly as robust as our data set. actually looking for when the foundation -- 100% of the subdivisions we recover in the country. we have a clear and more gradual or picture. is, the numbers generation really did not happen. >> a quick question. [indiscernible] the midwest in july, down 25%. likely oral were another statistical noise? >> it is a bit of statistical noise as well. numbers.in our midyear
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you are showing 87% increase quarter on quarter in chicago. that is comparing second quarter to second quarter a year ago. manufacturing is doing a little better. time.essed it is easy to get percentage increase. around at the rest of the region of the country. manufacturing is slowly starting to come back and i think that is a positive sign. i'm surprised to see that number. >> thank you for joining us. our economics editor here at bloomberg television, thank you for joining us as well . >> party on. >> party on. monaco, the tax haven of the french riviera, is experiencing
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a luxury housing boom of its own. check out a double skyscraper being billed near the mediterranean sea front where it skyscraper is -- a penthouse with a water slide connecting a dance floor to a circular, open-air swimming pool, just like my house here in a could sell for $400 million when he goes on the market next year. that is according to a french magazine, and that would make it the most expensive penthouse in the world, in case you are looking for that rather than a lego house, which we will talk about later as well. coming up, out with a bead on earnings. we will bring you the details there and discuss leadership .hanges plus, johnny manziel shows off his communication ship -- medication skills. the nfl is not amused. ♪
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>> for most collectors, owning a classic car is not just a purchase but a passion. the prices are reaching all-time highs. bloomberg went to the nation's capital is gathering of car aficionados. >> it is the most important week of the year for us. >> billions of dollars here. >> there are thousands of cars on display here. thousands of cars are for sale. ♪ a car showd off as where cars are judged. then these auctions came to town and it has created this gravity where this is the place the world watches to see how the car market is doing and not just to see which cars are the prettiest.
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>> he painted with a 10 inch rush and say the market is doing very well and that is true. you can see certain makes of cars have been performing that much better than other types of cars. we know for aris have been on an ascendancy. when a friday does that, it goes up as well. >> everybody's talking about for ra but there are so many other .ars doing very well the mercedes market is doing very well, porsche, jag wire, european sports and racing cars. >> the benefit of collector cars yacht, youbuying a may have to pay a good amount of money for it, but the car is almost guaranteed to either hold
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this value or go up in value. >> we encourage people to buy a car they love. a long time.t for >> it is all about the love of the car and sharing it with other enthusiasts. i do not think any car was ever purchased with a retail value. >> speaking of high prices, let's get to the day's high numbers. stolen byof lego sets a woman from long island. gloria somehow still 800 sets of the plastic bricks from a storage center. they were being kept there by a collector according to a nassau county policeman. she may have gotten away with the crime if she had not tried to sell the legos on ebay. she was arrested last thursday and arrange the next day on grand larceny charges. coming up in the next hour, we
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will speak with the man running lego. he joins us in the next hour. stay with us for that. to pay forp closer play. we will look at what a couple of recent decisions have done for college sports and what that will mean for your team. stay with us here. ♪
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>> two big decisions regarding the ncaa continue to play out in the sports business. a judge ruled a college sports organization could not deny players payment when the names and pictures are used for profit by others, like in a videogame, for example. the ncaa itself granted more rights to its wealthiest conferences, providing the most generous stipends and other benefits. -- moves -- the moves strike and they take college sports a few steps closer to paying students to play.
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many steps closer. a senior writer at bloomberg businessweek. a fascinating story because almost everyone who cares about sports has an opinion on whether college players should be paid. the ncaa, at least in this country, even more vilified than fee specter. fifa or specter. are we going to see a group of teams paying their players, even though they already do? >> the scope of these powers are quite limited. it is autonomy. the schools can now give their players. the ships and scholarships that full amount of the
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schools. there were costs not covered by the scholarships. a sickly just a fairness play. >> you mean books or breakfast, bottle service. >> now they can have cream cheese with their bagel and things like that. the rules were archaic before. now it at least acknowledges a lot of the schools and players deserve and have more expenses that need to be covered. what it really means is we are finally starting to see bigration between the schools and big football and basketball programs and the other sports. it is a fallacy that we have equality between them so we might is so treat them as they are. beginre was no quality to with. big schools, whether they were officially paying their players or not, the players got a lot more benefits than they would at a smaller school. >> i would disagree slightly. they get more benefits in the form of fancy locker rooms and how they are treated on campus.
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>> they were getting paid a legally. are, then they are. i do not think that was systematic. >> you do not think the biggest schools were doing that, offering jobs they do not have to go to, maybe the use of lincoln navigators they do not have to pay for? >> there have been instances, but i do not think that has been done systematically. part of the problem is there is a somewhat exaggerated notion of what the day-to-day life of football or basketball players, even at some of the top schools in the power conferences. i do not think these guys are living large in a similar nfl playershe way play. that is part of the problem. they are the engines of a multibillion dollar industry and yet many of them are scrapping for basically spare change to go on pizza runs and pay cell phone their parents
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travel to come see them play. >> they're living like a regular college students, but they are bringing in millions, billions of dollars. >> right. they're not necessarily living like regular college students. they're traveling all over the country, but they are not living like millionaires either. the biggest development we have seen and the one with the potential for the longest and broadest effect, is the that the ncaa's traditional justification of the preservation will no longer cut basis for the whole college system to deny compensation to players. that justification is now set to one side. it is crucial because it opens the door to further lawsuits that will demand a free market in player salaries well beyond what these limited steps, allow.
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it?ou think they deserve if they're making this much revenue for their schools? do they deserve to get money for that? >> certainly, it is safe to say college players deserve, at a minimum, full and meaningful education they are already promised under the existing deal. it does not bother me if they have money in their pockets to make sure mom can travel to the game. whether it would be a good idea for the ohio state to compete with stanford by paying multi-hundred thousand dollars salaries, that is an open question. is that what we want? if we want to have a new professional league that has the uniform of a major university, i suppose we could set that up. >> i do not think we do want that, -- >> in some way, you have to compensate those players, who could be living without a lot of
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money, but are generating so much money for a lot of people. >> a lot of these people do not backgrounds,ferent college scholarships are some of their only means by which they can have the education. we like to hold them to an ideal of the student athlete. they are traveling 70 hours a week and have at this everyday and they do not have time or resources to have a campus job as other regular students would. some way they can be compensated for all the billions of dollars they really do generate, television revenue, these contracts are huge. the value of the education they are getting is not enough. even if we say the scholarship is not enough compensation, they're not getting enough out of that. >> they are not allowed to major in business or law, and are forced to go to the school of visual arts and watch film. >> right. that is definitely a big problem at these universities.
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the case opened up, as you mentioned, is that in future cases, the defense is not applicable. what that can mean is hopefully these players can be paid fair market value. i think that is the easiest way to address this. us.hank you for joining paul, always a pleasure talking to you as well. we will be back in two. stay with us. ♪
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>> its 56 minutes past the hour, which means boomer television is on the markets. teachers are gaining across the yesterday. big gains a pretty good week last week. august is setting up quite nicely. dow jones up 30%. nasdaq futures up about 10 points. we will learn more about the new owner, of the los angeles clippers, steve ballmer. the former microsoft ceo and big
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billionaire weighing in on the future of the software maker. ♪
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>> we are 30 minutes away from the opening bell. you are "in the loop." i am matt miller, in for betty liu. green across the board, and the nasdaq composite index is up 14-year high. bursting of the -- highest since march of 2000, the bursting of the tech bubble. maxx's earnings beat estimates as well and it is raising the forecast for the entire year. is that a good or bad sign for the economy? thebilliton is planning
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biggest spin in mining history, spinning off its silver, cole, and aluminum assets. from cupcakes back to clothing racks, julian geiger is returning to the company that helped -- returning to a clothing company that helps struggling teen retailer. he was the top exec at a company that shut its doors last month and is back at the helm of his previous employer. sterns joins us on the management changes and whether it could lead to a pickup in sales. crumbs was the cockpit ac -- was the cupcake maker. resigned but previously he ran area postell for more than a decade. through the period when you and your brothers were actually shopping there and it was doing well. when he left in 2010 that is when the stock peaked.
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the stock fell 80% under thomas johnson, who replaced him, so johnson has agreed to step down and a privileged some of their results and they are not very good. they will lose about $37 million this quarter. margins are just terrible under johnson. as one retail analyst tweeted out, he went from 16% to -8%, "possibly the worst tenure in apparel retail history comes to an end." >> it seems to be a trend, bringing back the old ceos. >> is being turned around it from a very low base. >> what are his plans for turning around aeropostale? i have spent time in malls recently and i know that other stores are much cooler than aeropostale. >> because you are an accurate barometer for teen fashion. wells fargo are not too bullish on his prospects for turning it around.
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funny look at the combined market share of abercrombie & fitch, aeropostale, they have all lost market share. teenagers are spending less money on clothes and that malls and they have apps and are not spending it on clothing the way they used to be. aeropostale is doing worse than the competition. >> i will check out their gear in a few months. >> not exactly a skate shop. >> i prefer skate shops. thank you very much, olivia sterns. i was pausing for the moving and shaking intro there. ceo steverosoft ballmer is our mover and shaker. he made his public debut yesterday, paying $2 billion for.the low scentless clippers he talked about basketball -- for the los angeles clippers. he talked about oscar ball with
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trish regan but was also asked about microsoft's future. >> there are things that the company has to do for its future. of that under the role mobile-first, cloud-first. to do that will require new skills, hardware sales, hardware new places to go. he will describe how he wants to get their. >> bloomberg news managing editor tom giles is here with more on microsoft. he has our tech coverage. what do you think about ballmer's comments about microsoft? we will show the entire interview on "street smart." trish regan is flying back from l.a. right now. >> socgen nadella has come in with a very different management style and different outlook on things. very understated. you don't have the bombastic running around just a condition
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that you had under ballmer. different executive and yes to a different agenda -- he has to have a different agenda. one of the ideas is mobile first, not just selling phones for the sake of selling phones, like you had it -- like you had at nokia. that microsofts knows had to do well, which is change the way you do business. >> a few months ago i along with millions of other teenagers decided not to buy final at aeropostale and instead bought the new videogame titan fall, which was supposed to showcase microsoft's cloud technology as the first gain the integrated cloud functionality. 45, 6, seven hours that night i was not able to play because nadella's cloud crashed down and was working. businesses have that possibly more serious problems when that
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cloud comes down. why does this company have problems with what is supposed to be its number one strength now? >> just overnight, as you alluded to, the cloud platform had a several hour-long outage. there are companies who depend on this. much as it is a bummer for you not to be able to play your video games, it is a bigger deal for these mission-critical -- >> god for bid, i hospital. >> that is something microsoft has to work out. it is a whole new way of getting software delivered to you and delivering computing services to businesses. saless not good for his and his pitch to have it down as this long a period of time. >> azure being the business-oriented cloud.
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coming up, he is leading the fight against general motors. meet the lawyer who is suing over those recall cars and andi -- blamed for deaths injuries and even those that just lost a value because people are afraid to drive them. golfing royalty got together last night not far from here. roy mcelroy and tiger woods were there. erik schatzker was there as well. we will have more on that story in just a moment. ♪
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>> days ago lead attorneys were selected to represent gm car owners in a class-action case where the owners are suing for 2.6ries could gm recalled million vehicles for faulty ignition switches and millions and millions more for a variety of other issues. assigned ken feinberg to
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oversee payments from its unlimited fund, and he has said that gm is doing all that it should. , general motors so far, as far as i am concerned, has been very cooperative. we have set up this program -- >> they talked to you several times? >> oh, several times. i talked to all sorts of interested parties. mary barret said that herself, we want to do the right thing. untapped funds. >> steve berman, managing partner of the seattle law firm, will lead the class-action suit against jim, and is fired back that general motors'response has been unconscionable. ken feinberg is very well respected and i have met him before and he is an intelligent
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and charming man. he is being paid by gm to do this, right? >> correct comes he is in a gm's pocket, and i don't think gm is doing all it could. recall cars are in the fun is so if you have one of those cars and have been injured, you can make a claim. but on -- but if you are one of the 10 million other victims, they are not paying those people. nor have they paid anyone else injured by the 15 or 20 million other cars that have been recalled. they make the exception of the two point-some million cars that they are including in ken feinberg's funds and the millions of other cars from a lot of which have been recalled for the same reason, by the way? to pick one have been recalled for faulty emissions which problems, and people have been injured in accidents in
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these cars as well. why do they not include those in their unlimited compensation fund? >> we haven't got a good answer to that. as you point out, other cars have been recalled for the same ignition switch problem but gm will not pay victims who have been injured from those faulty switches. >> are you concerned mainly with people who have been injured, or worse, families of victims who have died in these car accidents, or are you also represented people who claim to have economic value lost due to the issues? >> i have been appointed to lead the charge for both, both the injured victims and for people who claim economic loss. >> are those separate classes, though? or do they all fall into one class? >> they fall into one preceding. -- one preceding.
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all the testimony taken from a personal injury cases, and the economic loss cases -- the cases themselves -- that will proceed on an individual basis, and the economic loss cases will proceed on a class-action basis. >> people will be included in the class who fall outside of the compensation fund as well as people who are included, i guess, in the compensation, or could be included in the compensation fund. is that correct? >> the case will be on behalf of both. if you have suffered personal injury you have a choice of going to the funder not -- the fund or not. are ineligible for the fund, you would also be covered by the case. >> what about someone who agrees compensationrg's deal and has designed some documents and gets the money and later realizes that he or she would like to go back for more?
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as that presented a problem -- does that present a big problem? >> if you take money from the fund you are releasing from the liability claim. >> i just wanted to make that clear because a lot of people have pointed out that that could be an issue. thank you so much for joining us. counsel in the class-action suit against general motors. coming up, the 25 or older who is taking the golf world by storm was across the river last night. rory mcilroy talks to bloomberg television. and the ceo will join me and talk about the house that lego build, literally. ♪
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>> we have breaking news out of israel. the israeli army says three rockets were fired from gaza into open areas in israel he territories. no one was injured. nonetheless, benjamin netanyahu has ordered reprisals, an attack against gaza. any cease-fire that was currently in place has now been broken. we will continue to follow this news. on a much, much lighter note, golf's 2 biggest stars, tiger woods and rory mcilroy, were out the new vapor series irons last night in new jersey. after showing off swings, mcilroy was asked if the game needs another tiger woods. >> i don't think it needs another tiger. i think it needs guys who are winning.
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i am competing in majors all the time and i am dominant in some away and i would love to be that guy. that is the role i am trying to play right now. there is only going to be one sure.woods, that is for i am trying to develop into my own role in this game and i'm happy with that. >> erik schatzker from "market makers" attended the event and you got a chance to sit down with rory and tiger. >> these are pretty intimidating golfers. >> the best golfers in the world? >> there is no question that tiger woods was once the best golfer in the world. no longer. that now belongs to rory mcilroy . that is precisely the problem. people including me are asking rory mcilroy if the game needs
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another tiger woods. popularitygolf's goes almost exactly with woods' career. golf's popularity started to decline in 2006. like i said, almost matches perfectly. i need to recite some statistics. last year, 400,000 people in this country quit playing golf. >> including me. >> 6 million fewer americans are golfing today than in 2000. hundreds of courses are shouting every year. golf is in a recession. golf is in a freefall, actually. >> i haven't played golf in a year and i'm not sure i will ever go back. it is just too difficult. a lot of people pick it up and realize it is not an easy game. itthat is one of the rubs,
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is too difficult, too elitist -- >> elitist? >> but it was popular when there was a start to capture people's attention. >> you are talking about someone who is incredible and wins everything and everybody wants to watch. not someone who is not a white guy because everyone else is a white guy, right? >> no, middle-aged, white guys, little larger around the middle. that is the additional image of the golfer. that is not what tiger woods was, that is not what rory mcilroy is. the guy is freaking built. >> and young. >> but it will take some time for him to establish the same time star power that woods had. woods for a period of time was the gretzky of golf. there was only one gretzky. hockey has never been the same. >> only one jordan as well.
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don't bring up lebron. >> we love much more on "american makers. -- market makers." >> it started 10:00 a.m.
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>> welcome back. you are "in the loop." i am matt miller, in four betty liu. 26 past the hour and you know what that means. we are on the markets, baby. final moments before the opening bell, not huge gains. can the streak continue? we are on the markets again in 30 minutes. but really, this whole show is on the markets survey now we will give you the top 10 stocks you need to know about before the opening bell. olivia sterns joins me, scarlet fu is here as well. i will kick it off with number 10, aeropostale.
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julian geiger has returned as ceo. thomas johnson agreed with the board to step down as ceo and director after the company has done horribly. served as their ceo from 1996 to early 2010. he then went over to a bake shop and did not do so well there, since the went bankrupt and closed down -- >> he resigned before they went under. number nine, tjx, the parent company of t.j. maxx, earnings-per-share topped analyst estimates. retail also raised its full-year outlook. >> keeping with the radial dutch retail thing, -- the retail fell. pollo loco it began with a neutral rating. >> number seven is verizon to
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medications. but itzon medications regained its title as the fastest wireless provider in the u.s. cap after adding capacity to relief network congestion in big cities like here in new york city. >> exporting goods sought a slide in -- dick's sporting goods saw a slide in second-quarter earnings. line continues to struggle after fewer americans like matt miller hit the links. >> after an internal review, walmart decided that the discount retailer would not be a good fit with smaller format stores. >> number four, urban outfitters. the retailer record -- reported a decline in second-quarter profits. sales at namesake stores -- why do i keep saying "namesake
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stores"? anthropologie.n >> i know that. three people. bhp billiton is prepared for the biggest spin off in mining history, separating its aluminum, cole, and silver assets into a new company worth $15 billion. many investors were expecting php to announce a stock buyback. >> number two, elizabeth arden. shares plunging after the company reported a wider than estimated loss in the quarter. a steep decline in celebrity perfumes, particularly justin bieber and taylor swift. matt, you're probably not a fan of girlfriend, justin bieber's -- >> are they luxury cosmetics?
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>> no. >> wanted to make an appointment at the spa and it was terribly expensive so i didn't go. >> fascinating insight. >> number one, home depot. second-quarter results beat estimates. they also announced they are releasing a new connected home products. i getting way ahead of myself are ready. as the markets start to trade him want to bring in the chief market strategist at a firm that oversees approximately $215 billion in assets. he says that even an increased volatility and global unrest, keeping cash is a mistake. it needs to be put to work. thank you for joining us. >> thank you for having me. >> where else do you put your money? buying bonds, you don't get much yield.
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u.s. stocks, are they still attracted at these prices? >> he is try to build wealth and protect the portfolio. in order to do that, you need to be broadly globally diversified. midcaps,de caps -- global reads. bonds, senior loans protected against rising rates. again, the goal is to build wealth. investors have been too defensive in this market to protect against many things. >> they might have been too defensive but you are urging caution when it comes to the financials, which are typically in fishery of the cyclical -- typically beneficiary of the cyclical upswing. we have a chart that shows that the litigation expenses that everyone is so worried about is actually not that big. versusnt of revenue four-fourth when 5% in 2012, % of revenue versus 4
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to 4.5% in 2012, 2013. >> i don't like the regulation, i don't like all the legal problems, they are changing the business model. i don't like the government so involved in the market. but financials is the broadest. that is ok because it is the lifeblood of the economy. >> the big banks, the ones who have already paid out $20 billion fines, are more profitable than ever. >> that is a good point. again, you want to be diversified. industrials, technology, energy. there is a lot of places to be. you want to be in the large, mid, and small caps. >> another sector you like consumer discretionary. so far it is the worst performing sector today.
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americans are still standing like a -- americans are still skimping like they have never done before. retail spending has stalled out. consumer discretionary -- more than just that. nobody is immune to the discounting. the gamensumer i call changer -- consumer discretionary has been the best-performing sector for the past four years. having a hard time this year but that is about to change. good housing, good jobs numbers, even payrolls increasing. of the the consumer, 70% economy, and i think they are a force to reckon with. the careful looking at those statistics because retail spending is at an all-time record high. >> a lot of people are waiting for the same thing. everything is pointing up as far as optimism for employment, actual unemployment figures are basically back to normal.
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we see the economy growing. wagee on the cusp of inflation, but not seeing it quite yet. when that happens do you expect a big spring up in consumer spending? consumers have not been willing to part with their cash. >> for the past four years consumer spending has been at a record high. >> good point. >> for the economy, the catalyst for growth, the tectonic shift -- energy, global trade, technology, frontier markets. everyone says that gdp of 4% is a surprise. i expect it to celebrate with these trends going on. next year we could be in the 5% range of gdp -- not >> wow, that would be a breaksclusive. scarlet, no? >> we are on track to potentially hit joins of
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dollars. -- hit trillions of dollars. >> i believe 2014 will be the year of mna, at levels not seen since 2007. transformative deals -- >> are they transformative? a lot of them seem like they are just chasing topline growth. family dollar. >> again, i think that is a transformative deal. m&a isthe board, important. the animal spirits have come back and they are going to continue and 2014 could be a record not only for u.s. mna, but global m&a at 2007 levels. what this does to venture janet yellen is the fed is behind the -- to fed chair janet yellen is the fed is behind the curve and the biggest risk to optimism is rising rates. she will be compelled to raise rates early in 2015. >> that wouldn't be the worst
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case scenario. thanks for joining us. ladies, always a pleasure. >> see you again tomorrow. >> i will see you again tomorrow. i see you almost every day, that is why i am so lucky, one of the many reasons. sprint's new ceo is jumping into the wireless industry price wars just one week after taking over the company. and the lego group ceo is going to join me and we will talk about what is going on at the toy company and a very special lego creation could just a few minutes into the session. ♪
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>> it is a concept made out of the kid's imagination, a life-size building made out of legos. they are turning it into reality as it lays the bricks for its first visitors center in denmark and we are joined by ceo jørgen vig knudstorp. what are you doing, building and a littleay there, house in front of your office out of legos? >> we are actually building a building that is quite large, in total, 12,000 square meters. 100 meters away from the place where the company was actually founded 82 years ago. it is in the place where it
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needs to be and it is going to be like -- in terms of really understanding what is possible, that is quite a few things you can do with lego bricks and we want to share that with the entire world in a playful, interactive white. way.ey fall, interactive it tells the story of the brand and the company behind it and the generations of ownership and what that has done to the company, quite a spectacular evolution over the decades. great place to go if you are a huge fan of lego, and we have had fans knocking on our doors over the years and we have decided to make it a reality and open it up to them, the only place in the entire world where you can go and experience the true lego story. >> i grew up a huge fan for many years, the only toys i wanted, and the same is true for my nephews and a lot of kids. but this house won't actually be built with lego-brand bricks,
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right? >> it won't be built with actual lego bricks, but the architect has designed it so that it looks exactly as if you have done that. every dimension, every stiarair, tile, it is the dimensions of the two by four lego bricks. bricks stacked on top of each other, although it obviously has the architectural expression that is wildly fascinating. 's i do not think that lego popularity could grow anymore from my years using it, but "bviously, "the lego movie proves he gets bigger and bigger and kids love going to legoland as well. do you have an online strategy, a social strategy, a mobile strategy? >> we certainly do, and you may
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not be aware, but on youtube the second most-watched brand of all brands on youtube happens to be the lego brand. 99% of the content is created by lego fans and users. we have a community of users that are active on a sort of facebook before facebook came about. it is a real help to us because it has connected fans and allowed them to interact in new ways, which is truly boosted the brand. it is an integrated part of how we do products, how would you marketing, and how we operate our business. >> over one billion people are on facebook. do you have figures for, the people have used legos on planet earth? >> ah, wow, that is a huge number. we are having a very large market in russia, huge market in the u.s., and even places like
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india, brazil, china, we have a huge fan base. i don't have a number but it would be very close to that number i'm sure. >> how do you keep the brand so strong? it seems like a barrier to entry in the market is fairly low and there are competitors here and owne to legos with their kind of building bricks, basically stealing the whole idea, no problem, but they don't seem to get a hold as far as market share. how do you keep your brand dominance? >> i think there is a lot of things to that but it is essentially about innovation, whether it is innovation in business processes -- i think we run an amazing global operation that is incredibly lean and innovative in its manufacturing and distribution techniques, but certainly it is about the product. we have an amazing design team that is in tune with kids worldwide. a couple of years ago we friends,lego
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particularly relevant for girls. when it came out it was a huge success in boston, beijing, berlin. it is the ability we have ever year to reinvent ourselves. productsy is what the are all about. >> thank you for joining us. appreciate our little minitrip to lego land. live inen vig knudstorp denmark. as the security forces ramp up attacks against the islamic state, which everyone knows that her as isis -- knows better as isis, signals are turning point. -- signals of a turning point.
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>> time now for "mobile outlook. -- "global outlook."
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israel has carried out strikes -- terrorcambe sites. the rockets landed in an open area and did not injure anyone but the country decided on the counterattack anyway. ukraine says it is making gains against rebels in the eastern nsk, taking control of one of the four districts there. the report of advances comes as the red cross says it is working towards an agreement on details of a safe passage plan for russian convoy intended to ship humanitarian supplies. foreign ministry met with his russian counterpart for five hours with no apparent breakthrough. later he talked with bloomberg television. >> we should work on the real problems, on closing down the , to monitor and verify the situation, and of course, to
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reach a breakthrough on hostages. >> why you would allow any supply train to pass to your enemies in the war is the on -- is beyond me. ceo will double the amount of data available for share plans with the new framily share pack. customers who switch to sprint can have as many as 10 wireless data, 20 gigabytes of $100 a month. wow. t-mobile offers 4 lines with 10 gigabytes of data for the same price. the question is does the coverage reached the place where you live and hang out? 's cloud computing service experience a major global outage that lasted five hours. azure is a critical part of the plan to remake the software
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company. the disruption -- and i mean in a bad way right now -- affected at least 6 major components in multiple data centers. so much for azure. more information on a big hacking attack. chinese hackers stole social security numbers, names, and and addresses from 4.5 million patients of community health systems. they made off with a nonmedical information from people who visited doctors offices associated with community health. the attacks occurred in april and june. we have breaking news on the family dollar story here. the merger saga -- the board is likely to meet to review the bid. family dollar's board, which should meet to review the bid its basict of just responsibility to shareholders,
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is likely to live up to those response abilities. of course, family dollar has been offered $9.7 billion. shareholders have been offered $70.50 a share by dollar general. that goes up against the $8.5 billion offer from dollar tree. that does it for "in the loop" today. tomorrow, the new york city comptroller will be "in the loop ," as it counts $160 million in its coffers. tomorrow at 8:00 a.m. eastern. you do not want to miss that. ♪
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>> it is 56 past the hour. that means a bloomberg television is "on the markets." i am scarlet fu. u.s. stocks are rising. the s&p 500, up by 4 points. dow industrials adding 38
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points, 16,877. 4518. currently at european stocks gaining as well. the stock 600 is adding .5%. there's also buying in treasuries after a report on consumer prices showed the cost of living in the u.s. climbed in july at the slowest pace in five months. slower inflation is a theme in the u.k. as well. the pound is dropping to a four-month low versus the dollar. inflation is slowing in july more than economists forecast. we are also watching oil prices. right now you have brent crude holding at about it 14-month low, lowest since june 2013. nymex crude is falling for a second day, right around the $95 level, just almost a $96. down by half of 1%. i am joined by someone
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who covers energy here in new york. the tensions in iraq seem to be easing, kurdish forces are gaining on the ground. is that having much of an impact on oil? when the tensions ratchet up it seems that the impact is limited. >> most of the oil in iraq is in this house and the fighting has mainly been in the north -- hosted the oil in iraq is in the south and the fighting as mainly been in the north. after the u.s. got involved, the iraqi forces have managed to push the islamic state militants back a little bit, with the help of the u.s. it appears the conflict is being contained. >> when you talk to traders, how often are they referencing these geopolitical events, the steps by the u.s. military or the iraqi military and the kurds? >> all the time.
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it is in the front of everybody's mind. with all the things that have gone on this year -- israel and gaza and syria and iraq and even russia and ukraine -- it has been the threat, the risk of a disruption. there haven't been actual disruptions. libya was an actual disruption but that is coming back now. that is another factor in you seeing these -- the price slide back down now. the u.s. market is sort of an island because the u.s. doesn't -- there is a linkage based on the product, gasoline and other things that are traded locally -- globally, but what you see but upcting to, flattish a little bit lately, is that the expectation that the u.s. consumption is rising because the economy is doing well. >> i wonder how this ties in with the federal reserve. the jackson hole symposium takes
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place later this week. with all this discussion on when the federal reserve will raise interest rates, what kind of impact does that have on oil prices? >> that is a very controversial question. has been speculation in the past several years that low interest , decreasing role of investors and speculators and commodities markets -- not just oil markets, but the biggest commodities, has been leading to generalized increase in prices. >> we will have to see. thank you so much. we are "on the markets" once again in 30 minutes.
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>> live from bloomberg headquarters in new york, this ," with erikakers schatzker and stephanie ruhle. >> home ownership could grow even faster. who is going to do all the building? ballmer is unleashed. he is bringing his personality to the nba. trish regan spoke with him. plotting his comeback, the best golfer in the world is sidelined by injury once again. are you betting to get -- that against tiger

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